Kenya Airways shares resume NSE trading, massive dillution

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Written by Kenyan Wall Street

Published: November 30, 2017 9:40 PM

Kenya Airways PLC resumed trading on Thursday after a two-week suspension to facilitate the share split and simultaneous consolidation of the company’s shares which forms part of the Kenya Airways PLC capital transaction.

As a result, existing ordinary shareholders have seen their shareholding reduced through a reverse 1:4 (one share for every four held) share split.

During the Thursday’s session, Kenya Airways share price shot up by more than 130% to close at Sh 12.50, from its last closing price of KES 5.30 before the suspension.

“For illustration purposes, an investor holding 4,000 ordinary shares prior to the restructuring, will see their shareholding reduced to 1,000 ordinary shares.

Going forward, we expect significant volatility in share price as the market reprices and recommend that investors exercise caution when dealing in the group’s shares.” Stock broker Apex Africa Capital noted in its daily note to investors.

Fred Mutisya, an avid investor at the Nairobi Securities Exchange has explained the effect of the debt restructuring exercise in a short video below.

The restructuring saw the Government increase its shareholding to 48.9% of the ordinary voting shares with the consortium of local banks through a special purpose vehicle – KQ Lenders Company 2017 Ltd – owning 38.1 per cent shares of the airline after having the debt owed to them by KQ converted to equity.